CAZALY RESOURCES LIMITED — Capital/Financing Update 2009

Aug 2, 2009

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ASX Release 3 August 2009

CAZALY REACHES AGREEMENT TO BUY GONDWANA’S INTEREST IN PARKER RANGE

Australian diversified resources company Cazaly Resources Limited ( ASX: CAZ ) (“Cazaly” or “the Company”) has increased its stake in the Mt Caudan tenement area, located in the Yilgarn iron ore district of Western Australia, from at least 80% to 95% after reaching agreement with Gondwana Resources Limited ( ASX: GDA ) (“Gondwana”) and others.

Under the terms of the original Mt Caudan Iron Ore Farm in between Cazaly and Gondwana, Cazaly obtained the right to earn an 80% interest in the sole and exclusive right to explore for and mine iron ore within the tenement area, with Gondwana retaining a 20% interest in the iron ore rights and the right to explore for and mine gold and all other minerals other than iron ore.

A small portion of this tenement area was also covered by an additional agreement in which Gondwana held 15% of the residual iron ore rights and other parties the remaining 5%.

As part of the agreement reached with Gondwana and others Cazaly has agreed to pay a total of A$270,000 and either issue A$842,500 worth of Ordinary Cazaly shares (based on a 10 day VWAP prior to the shares being issued) or make an additional payment of A$842,500 (subject to the discretion of the Cazaly Board).

Of the total consideration Gondwana will receive A$250,000 and be issued A$750,000 worth of Cazaly Ordinary shares (or equivalent cash payment), with the outstanding to be issued to private individuals not associated with either party.

Cazaly Managing Director Nathan McMahon believes the Mt Caudan tenement area is fast shaping as a key iron ore province and for the company to have secured such a significant stake is a real coup.

“We feel Mt Caudan will prove to be an important iron ore project in the Yilgarn region, and to have secured a 95% stake in it is a real coup for Cazaly and its shareholders,” Mr McMahon said.

The Parker Range Iron Project, located within the Mt Caudan tenement area, is ideally located in southwest Western Australian, approximately 400km from Perth and 60 km by road south of Southern Cross.

The Resource Estimate for the Mount Caudan deposit at the project is currently 23.5mt @ 55.4% Fe , which a recently completed Scoping Study has confirmed could economically sustain a 2-4mtpa operation. Importantly the company has commenced rail access discussions with private rail company Westnet Rail and recently signed a MoU with Esperance Port Authority to ensure its export requirements can be incorporated into the Port Authority’s expansion plans.

For further information please contact:

Nathan McMahon/ Clive Jones David Tasker Joint Managing Directors Cazaly Resources Limited Professional Public Relations Tel: 08 9380 4600 Tel: 08 9388 0944/ 0433 112 936 Em: admin@cazalyresources.com.au Em: david.tasker@ppr.com.au

Website: www.cazalyresources.com.au

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Competent Persons Statement

The information that relates to exploration targets, exploration results and drilling data is based on information compiled by Gregory Miles who is a Member of The Australian Institute of Geoscientists and an employee of the Company. The information that relates to the Mineral Resource Estimate has been authorized by Mr Paul Payne who is a member of the Australasian Institute of Mining and Metallurgy and an employee of Runge Limited. Both Mr Miles and Mr Payne have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Miles and Mr Payne consent to the inclusion in their names in the matters based on their information in the form and context in which it appears.

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